For Circle K, what is the significance of the number of franchisees in relation to the pending actions disclosure in Exhibit L?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
Column D: Pending Actions disclosure is responsive to the following question: Does the person in Column A currently have any administrative, civil or criminal action pending against him or her alleging a violation of franchise or securities law, fraud, embezzlement, fraudulent conversion, restraint of trade, unfair or deceptive practices, misappropriation of property or any comparable allegations? This disclosure includes any actions other than ordinary routine litigation that are incidental to the business which are significant in the context of the number of franchisees and the size, nature or financial condition of the franchise system or its business operations.
Source: Item 23 — RECEIPTS (FDD pages 100–359)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, the number of franchisees is a factor in determining the significance of pending actions disclosed in Exhibit L. Specifically, Exhibit L lists Regional Service Providers and provides information about them, including disclosures of any pending administrative, civil, or criminal actions against them.
The FDD states that these disclosures include actions beyond routine litigation that are significant when considering the number of franchisees within the Circle K system. This means that a pending action against a Regional Service Provider might be considered more significant if Circle K has a large number of franchisees, as the potential impact of the action could affect a larger group of franchisees. The disclosure aims to provide franchisees with information to assess the potential risks associated with the individuals or entities providing services within the Circle K franchise network.
Therefore, prospective Circle K franchisees should pay close attention to Exhibit L and consider the number of franchisees when evaluating the significance of any disclosed pending actions. A higher number of franchisees could amplify the potential impact of any adverse actions involving Regional Service Providers, making it a more critical factor in the franchisee's risk assessment.